MORTGAGE MATTERS

3 min read

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Aug 2022

3 Tips for Buying and Selling Your Home at the Same Time

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WHAT YOU'LL LEARN

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What to prioritize first

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The importance of financing

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How to plan your timeline

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WHAT YOU'LL LEARN

check icon

What to prioritize first

check icon

The importance of financing

check icon

How to plan your timeline

Buying a home can be challenging on its own; when you’re selling your current home at the same time, the effort is doubled. But don’t worry, having a plan is the first step! We’ve got three tips to make the entire process more manageable.

Get Your Financing in Order  

As you begin selling your home, don’t start shopping for the new one just yet. You’ll want to be sure you have the funds for your new home’s down payment, and you might not sell for as much as you’d hoped. Also, many factors can affect the sale of your current home, from market conditions to unexpected repairs to your buyers’ financing. It might take longer than expected.

Be sure to get pre-approved now, unless you have cash to buy the new home outright. You don’t want to find your next home only to learn you can’t get the funds. And don’t trust those emails that say your credit’s amazing (although we’re sure it is!) or assume you’ll be approved for a certain amount. Market conditions and lending guidelines have likely changed since you last bought.

Offer Contingencies

If you need the proceeds from the sale of your home to buy another, you can use an offer contingency. This gives you a set amount of time to sell your current home to help finance the new purchase. Ask your agent about how to follow these steps:

Make your offer contingent on the sale of your home. This gives you the option to back out of a purchase if you are unable to sell your current home. It can also protect you from legal consequences and losing your earnest money depositA deposit made to the seller that represents your good faith to purchase a home.earnest money depositA deposit made to the seller that represents your good faith to purchase a home..

Request an extended closing: Request extra time, usually 60 days, to sell your current home.

Get your current home ready: The more attractive your home is, the more potential buyers you’ll get. Updates include repairs, cleaning and decluttering, or painting. Here are some tips on boosting your curb appeal, and don’t forget “screen appeal” – how your home comes across on mobile devices.

Any contingency, such as extended closing or inspection, can weaken your offer in a seller’s market. Talk to your agent about the best solution for your needs.

Set a Reasonable Timeline

Until your current home sells, some factors are in flux. For example, until you receive the proceeds from your old home, you’ll need funds for the down payment on the new home. You may need to tap into your savings or borrow against a retirement account (just be sure to pay yourself back after the home sells to avoid default and penalties).

Also, you may need a temporary place to live if your home sells before you close on the new one. If it’s a few days, consider whether you want to stay at a hotel or with friends (don’t forget your pets!). If the delay is longer, ask your agent about requesting a “lease-back” provision to “rent” your old home to yourself, typically for 60 days, until the new home is yours. Finally, don’t forget that you’ll need a space, such as a rented storage unit, to store your things in the meantime.

The most important thing to manage during the selling/buying process is your expectations. The right lender is a great place to start, and we are always here to help!